The family of businessman, Sean Quinn and the State-owned IBRC have agreed to enter a mediation process in their long-running legal dispute over liability for loans of €2.4bn made by IBRC’s predecessor, Anglo Irish Bank to Quinn related companies.

Preparations for legal action, now expected to commence in January, will continue if the mediation process doesn’t succeed.

The Quinn family contend the money originally lent to the group by Anglo Irish Bank was done so inappropriately and that therefore they do not have liability to repay the loans.

It was reported that both parties were close to an agreed resolution earlier this year but that this became impossible to pursue because of the focus on the former Anglo Irish Bank’s relationship with another large borrower, Denis O’ Brien.

The outcome of the Quinn/IBRC case could determine the amount of surplus available to the special liquidators of the bank, the amount of that surplus available to repay taxpayers and whether outstanding junior bondholders will be paid.